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Grouse River Outfitters Ltd v. Oracle Corp.

United States District Court, N.D. California, San Francisco Division

June 21, 2019

GROUSE RIVER OUTFITTERS LTD, Plaintiff,
v.
ORACLE CORPORATION, Defendant.

          FINAL PRETRIAL ORDER

          LAUREL BEELER UNITED STATES MAGISTRATE JUDGE

         The court held a final pretrial conference on June 20, 2019. The court issues the following pretrial order pursuant to Federal Rule of Civil Procedure 16(e).

         1. Trial Date and Length of Trial

          A. The jury trial will begin on July 8, 2019, in Courtroom B, 15th Floor, U.S. District Court, 450 Golden Gate Avenue, San Francisco, California. The trial will last up to five days. The trial will be held Monday through Friday from 8:30 a.m. to approximately 1:30 or 2:00 p.m. (or slightly longer to finish a witness) and will include two fifteen-minute breaks. Counsel must arrive at 8:15 a.m. to address any issues (such as objections) before the trial day begins. Once the jury begins deliberations, it usually stays past 2:00 p.m. Also, Monday may run the full day and will include jury selection, opening statements, and two or three witnesses, as the day permits.

         B. Each side will have 10 hours per side for direct examination of its witnesses and to cross examine the opposing party's witnesses, including all objections raised during the trial day. In addition, each party may have up to 45 minutes for its opening statement and one hour to close (including rebuttal closing for the plaintiff).

         2. Procedures During Trial; Exhibit and Witness Lists; Witnesses

         The parties should refer to the court's December 16, 2016 Pretrial Order[1] for the court's procedures regarding the presentation of exhibits, depositions, and witness testimony during trial. In particular, the court reminds the parties of its procedures for using deposition excerpts.[2]

         The parties will call the witnesses on their separate witness lists. As discussed at the pretrial conference, if the parties identify the same witnesses, the defendant will examine the witnesses when the plaintiff calls them (as opposed to recalling them).

         3. Claims, Defenses, and Relief Sought 3.1 Plaintiff's claims

         Grouse River contends that NetSuite (now owned by Oracle) induced it to enter into a set of contracts for NetSuite's software and related services (the “Agreements”) on March 29, 2014, by fraudulently making certain false representations. The actionable alleged representations that may form the bases for Grouse River's claims are listed in the court's order at ECF No. 291.

         Grouse River dismissed with prejudice its claims for negligent misrepresentation and breach of contract.[3] Its remaining claims are for (1) fraudulent misrepresentation (by NetSuite to induce Grouse River to enter into the Agreements), (2) fraud in the inducement (of the Agreements), and (3) unfair or fraudulent practices, in violation of California Business & Professions Code § 17200.

         3.2 Defendant's defenses

         Oracle denies Grouse River's claims. Oracle contends that NetSuite did not make any false representations to Grouse River and that NetSuite did not cause Grouse River any harm. Oracle also contends that Grouse River waived its fraud claims and failed to mitigate its alleged damages.

         3.3 Relief sought

         Grouse River seeks compensatory and punitive damages. Grouse River and Oracle both seek costs and attorney's fees if they prevail.

         4. Stipulations[4]

         A. Grouse River will not introduce certain recorded phone conversations of NetSuite employees that Grouse River produced during discovery.

         B. Grouse River will not introduce evidence or argument regarding communications between Plaintiff's counsel and Karen Messick, which resolves Oracle's Motion in Limine 2.

         C. Grouse River will not introduce evidence regarding the compensation or wealth of Oracle's executives, including Larry Ellison. It is Grouse River's position that this does not prevent Grouse River from proving that before NetSuite was acquired by Oracle, NetSuite's executives were compensated in a manner that motivated them to inflate revenues by overselling the qualities of its systems and services.

         D. All exhibits produced by a party or by Grant Thornton, Grouse River's accountant, are presumed to be authentic.

         E. Exhibits listed on the parties' exhibit list are deemed admitted when mentioned by any party during trial unless there are previous objections to them.

         F. The parties agree that demonstratives (i.e., charts, power point slides, models, etc. that do not go back into the jury room) need not be listed on the Trial Exhibit lists.

         G. The jury will be given a notebook that includes a glossary, cast of characters, and chronology, assuming that the parties agree on a notebook and the court approves it. The court does not address at this time whether the jury will be given a list of the actionable alleged representations; the parties may raise this issue closer to trial or at trial.

         5. Motions in Limine (“MILs”)

         For the reasons stated on the record and below, the court rules as follows.

         5.1 Plaintiff's MILs

         5.1.1 MIL 1 to Exclude Limitation-of-Liability Provisions - Denied

          Grouse River moves to exclude the limitations of liability contained in the Agreements, such as paragraph 10 of the March 30, 2014 NetSuite Subscription Service Agreement. The court denies the motion.

         Grouse River dismissed its breach-of-contract claim with prejudice (and also dismissed its claim for negligent misrepresentation). Its remaining claims sound in fraud or misrepresentation, and it thus argues that the limitations-of-liability provisions are irrelevant, inadmissible, and confusing, given that California courts refuse to enforce contractual limitations on liability in cases involving fraud or misrepresentation. As Oracle argues, however, whether the limitations-of-liability provisions are legally enforceable as a contractual matter is a separate question from whether they are factually relevant to Grouse River's remaining fraud and misrepresentation claims, including the issue of whether Grouse River's reliance on any of NetSuite's alleged misrepresentations was reasonable. Grouse River's cases do not rebut Oracle's arguments regarding the factual relevance of these provisions or support its argument that the provisions should be excluded under Federal Rules of Evidence 401 or 403. Cf. ADT Sec. Servs., Inc. v. Swenson, No. 07-2983 (JRT/AJB), 2011 WL 4396918, at *2-3 (D. Minn. Sept. 21, 2011) (denying motion to redact limitation-of-liability contract provisions in a misrepresentation case and admitting into evidence the full, unredacted contract because “the jury must see the entire Agreement to fairly determine whether [plaintiff] was fraudulently induced into signing it and whether she reasonably relied on [defendant's] representations . . . . [T]he jury must evaluate whether [plaintiff] would have relied upon statements allegedly made to her by [defendant], despite the limitations of liability and other statements in the Agreement”).

         As discussed at the pretrial conference, the court will instruct the jury that Grouse River is not bringing a breach-of-contract claim and that the limitation-of-liability provisions are not legally applicable to Grouse River's fraud claims.

         5.1.2 MIL 2 to Exclude Expert Opinion on Ultimate Issues of Law - Withdrawn

         Grouse River withdrew this motion in limine.[5]

         5.1.3 MIL 3 to Preclude “Prejudicial Statements and References” - Denied

         Grouse River moves the court to enter fifteen “rules” that Grouse River has drafted to govern the conduct of the trial. The court denies the motion.

         “The purpose of a motion in limine is to admit or preclude specific [evidence].” M.H. v. Cty. of Alameda, No. 11-cv-02868-JST, 2015 WL 894758, at *9 (N.D. Cal. Jan. 2, 2015) (citing cases). “To serve th[eir] purposes effectively, however, motions in limine must identify the evidence at issue and state with specificity why such evidence is inadmissible.” Colton Crane Co., LLC v. Terex Cranes Wilmington, Inc., No. CV 08-8525 PSG (PJWx), 2010 WL 2035800, at *1 (C.D. Cal. May 19, 2010) (citing United States v. Cline, 188 F.Supp.2d 1287, 1292 (D. Kan. 2002)). “Additionally, matters of day-to-day trial logistics, common professional courtesy, and jury selection are not proper subjects of motions in limine.” Id. (citing Kelly v. New West Fed. Sav., 49 Cal.App.4th 659, 671 (1996)).

         Grouse River does not identify any specific evidence in its motion in limine and thus provides no basis for the court to make an in-limine ruling. Cf. M.H., 2015 WL 894758, at *9 (denying motion in limine where “Defendants offer no examples from which the Court could fashion a ruling”). Many of Grouse River's requests are procedural or logistical, not evidentiary, and thus are not the proper subjects of motions in limine. Cf. Colton Crane, 2010 WL 2035800, at *1. The court's denial of this motion is without prejudice to either side's objecting to any evidence or conduct at trial.

         5.1.4 MIL 4 to Strike Oracle's Affirmative Defenses - Denied

         Grouse River moves to strike Oracle's affirmative defenses, particularly its affirmative defense of waiver. The court denies the motion.

         Grouse River filed its motion in limine on May 24, 2019, when the operative answer was Oracle's answer to Grouse River's second amended complaint. On May 31, 2019, Grouse River filed a third amended complaint, [6] and on June 14, 2019, Oracle filed a new answer.[7] Oracle argues that its new answer moots Grouse River's motion to strike affirmative defenses in its old answer. Even if Oracle's answer to the second amended complaint remained operative, the court would deny Grouse River's motion. Grouse River's only argument is that Oracle's affirmative defenses are insufficiently pleaded. Oracle (or, rather, NetSuite, which at the time had not yet been acquired by Oracle) filed its answer and affirmative defenses to the second amended complaint two-and-a-half years ago.[8] Grouse River never moved to strike the affirmative defenses. Grouse River “conducted discovery and prepared its case in the face of these insufficiently pled defenses. The time for correcting the injury occasioned by allegedly improperly pled defenses is past.” Cf. Capplanco Eleven, Inc. v. Xerox Corp., No. 88 C 9565, 1990 WL 51481, at *1 (N.D. Ill. Apr. 11, 1990) (denying motion to strike affirmative defenses as insufficiently pleaded where defendant filed answer containing affirmative defenses eight months earlier and plaintiff did not move to strike them until the eve of trial).

         5.2 Defendant's MILs

         5.2.1 MIL 1 to Exclude Evidence Regarding NetSuite's Other Customers and Lawsuits - Granted in Part

         Oracle moves to exclude any evidence or argument regarding (1) other litigation brought against NetSuite or Oracle and (2) NetSuite's relationships with, or work for, other customers. It argues that any evidence is improper propensity evidence under Federal Rule of Evidence 404(b) and in any event is prejudicial under Federal Rule of Evidence 403. The court grants the motion in part and excludes (1) evidence or argument about the fact that NetSuite or Oracle may have been sued by other customers and (2) Colorado Kayak Supply's review of NetSuite and news articles about Billabong's NetSuite implementation. Beyond that, the court declines to enter an order categorically excluding evidence or argument about other lawsuits (beyond the fact of lawsuits being filed) or NetSuite's relationships with or work for other customers and will address issues in context as they may arise at trial.

         “Evidence of . . . other act[s] is not admissible to prove a person's character in order to show that on a particular occasion the person acted in accordance with the character.” Fed.R.Evid. 404(b)(1). “This evidence may be admissible for another purpose, such as proving motive, opportunity, intent, preparation, plan, knowledge, identity, absence of mistake, or lack of accident.” Fed.R.Evid. 404(b)(2). Even if evidence is admissible under Rule 404(b)(2), “[t]he court may exclude relevant evidence if its probative value is substantially outweighed by a danger of one or more of the following: unfair prejudice, confusing the issues, misleading the jury, undue delay, wasting time, or needlessly presenting cumulative evidence.” Fed.R.Evid. 403.

         Other lawsuits: The probative value of other lawsuits against NetSuite or Oracle is limited, particularly where (as here) those suits were settled and voluntarily dismissed without any finding of liability. Cf. Fabric Selection, Inc. v. NNW Import, Inc., No. 2:16-cv-08558-CAS(MRWx), 2018 WL 1779334, at *7 (C.D. Cal. Apr. 11, 2018) (granting motion in limine and excluding evidence of other lawsuits where, among other things, there was no finding of liability in other lawsuits). By comparison, the potential for unfair prejudice is significant. Cf. Copart, Inc. v. Sparta Consulting, Inc., No. 2:14-CV-00046-KJM-CKD, 2018 WL 1871414, at *7-8 (E.D. Cal. Apr. 19, 2018) (granting motion in limine and excluding evidence of defendant's disputes with third parties because of, among other things, “the high risk the jury will treat the evidence as propensity evidence[, ] weighed against the relatively low probative value of this evidence as to [defendant]'s motives or intent in this case”) (citing Bioriginal Food & Sci. Corp. v. Biotab Nutraceuticals, Inc., No. 2:13-CV-05704-CAS(Ex), 2015 WL 10733384, at *5 (C.D. Cal. Aug. 24, 2015)). Additionally, evidence of other lawsuits against NetSuite or Oracle is likely to confuse issues, mislead the jury, cause undue delay, and waste time because “the evidence will spawn collateral mini-trials to disprove or rebut” the allegations made in those lawsuits. Cf. Id. at *7.

         Colorado Kayak Supply's review and news articles about Billabong: In its complaint, Grouse River references a negative online review by Colorado Kayak Supply's CEO about his negative experiences with NetSuite's SuiteCommerce Advanced product, and in its initial disclosures, it identified NetSuite customers with relevant information and later sought discovery about one customer, Billabong. (The court denied discovery.) Oracle moved to exclude the review and news articles on the ground that they are irrelevant and inadmissible hearsay. Grouse River states that it has no plans to introduce the review and news articles, [9] and the court thus excludes this evidence, which in any event is inadmissible hearsay.

         Beyond the fact of lawsuits being filed against NetSuite or Oracle, it is possible that evidence of customer complaints may be permitted under Rule 404(b)(2). The court cannot evaluate that possibility on this record (or evaluate whether the evidence is more probative or more prejudicial under Rule 403). Grouse River must make a proffer outside of the jury's presence ...


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